Why we should keep Medicare Locals

November 4, 2013

When I was 12 I helped my dad, a teacher, build our modest weatherboard family home at North Epping, NSW, on Saturdays and school holidays. I knew every bearer and joist, every sill and soffit. I happily cut up Tilux for the bathroom and kitchen walls with a handsaw and fibro cutters, amidst clouds of asbestos dust.

Twelve years ago I drove to see the house again. I missed it, retraced and found that it had vanished. Instead, there stood a McMansion. Long time and lots of love to build; gone in an hour with a bulldozer.

Rumours prior to the recent Federal election included one that a Coalition government would demolish Medicare Locals. That rhetoric settled down, but questions persist. Like the National Preventative Health Agency, also under threat http://www.news.com.au/national-news/commonwealth-agencies-to-be-cut-by-abbott-government/story-fncynjr2-1226724733088, these new structures from the past five years of change in the health system took lots of energy to establish but will require no muscle to break up – porcelain vases all. They are ruddy turnstone fledglings asked to fly immediately on hatching to Alaska for summer.

It would be miraculous if every Medicare Local had worked well, and as miracles are scarce, they have not. But this is no argument for their abolition.

Variation is a feasible management challenge here as it is in clinical practice. Many Medicare Locals have not had the time and/or the nurture needed to take firm root. Grumpy, conservative hospital networks – and there are some – with whom Medicare Locals are expected to work, are stony ground. The fault, dear Brutus, is not always with the Medicare Locals.

If I were to pay for you to take a world tour of health services in affluent societies (don’t worry, it’s not a serious threat), you would find all of them bothered by one thing above all others – how to link hospital and community care more effectively. This is not a fad: it arises from the reality that increasing numbers of older people and people with multiple serious and continuing illnesses require joined-up care that moves from hospital to community and back as easily as crossing a leafy lane.

Well, then, how to make this work?

Recently I attended a conference in London run by McKinsey and Co, a consultancy that has been used by many governments and the private sector to assist in achieving integrated care.

Medicare Locals can – and some are – playing vital role in Australia’s response. Three strategies emerge that could be applied with benefit to accelerate our progress:

pick the low-hanging fruit – scale up successes;

change the way health care provision is financed; and

provide incentives for new, more effective and efficient care.

In the case of Medicare Locals and the first point, a review should identify the elements of success among those that have worked well. These elements should then be supported Australia-wide – with financial incentives and sanctions to make them happen.

Second, the fee-for-service model of reimbursement that we have at present is unsuited to long-term, joined up care. The split between Commonwealth and states, private and public, stands in the way of success. This will be hard to negotiate but not impossible.

Third, and linked to this, is the need to build into our health care system of the future a way (as has been done in parts of the US and UK) to support innovation and reward greater effectiveness and efficiency. The reward should come to the service and to the provider. In essence, more effective and efficient care should receive bigger rewards.

These principles are emerging around the world. We would do well to think seriously about them before calling for the ’dozers and the gelly to demolish Medicare Locals.